Piedmont Lithium Ltd (ASX:PLL, FRA:PL4, FRA:PL4A, NASDAQ:PLL) has drilled up its best ever interceptions at its namesake Piedmont Lithium Project on the Carolina Tin-Spodumene Belt (TSB) in the US state of North Carolina.
The company’s outstanding grades from 4 Central property holes in newly-discovered pegmatites included 43.2 metres at 1.73% lithium oxide, the thickest high-grade interception reported to date for Piedmont project.
Other stand-outs at Central property were 14.1 metres grading 1.63% lithium and 28.1 metres grading 1.35% lithium, in two more holes.
Nineteen exploration target holes at Piedmont project’s 868-acre Core property also delivered “strong results consistent with historical drilling.”
Three rigs are on-site at Core, undertaking phase IV drilling.
Fifty-seven holes have been drilled at Core, with assay results pending for a further 34 holes.
Piedmont is now the Carolina TSB’s biggest lithium landholder, holding 1,824 acres.
It is preparing a maiden mineral resource estimate for the Central property which it expects to publish by April 2019, in June quarter 2019.
An updated mineral resource is also expected next quarter for Core property, in June 2019.
The project’s existing mineral resource of 16.2 million tonnes grading 1.12% lithium is expected to be increased with both updates.
Piedmont President & CEO Keith D Phillips said today: “We are exceedingly happy with the early results from phase IV drilling.
“It is clear to us that the Core property will continue to grow in size, and the results from Central are potentially transformational for the project.
“With a maiden resource for Central now planned for next month and an updated resource at Core expected in by June, we believe Piedmont will soon be positioned as one of the largest hard-rock lithium projects in North America, while enjoying all the benefits of our unique North Carolina, USA location.”
A goal for Piedmont is to significantly expand the 13-year project life modelled in the company’s September 2018 scoping study for its namesake project.
The updated study modelled a larger lithium hydroxide operation valued at US$888 million ($1.25 billion) using an after-tax net present value (NPV8) calculated at an 8% discount.
Project payback was about 2 years, based on lithium hydroxide cash costs of US$3,960 a tonne, while the internal rate of return (IRR) was an after-tax 46% IRR.
Steady-state spodumene concentrate production was forecast at 170,000 tonnes a year grading 6% lithium for a steady-state 22,700 tonnes a year of lithium hydroxide over a 13-year project life.
Project life lithium hydroxide cash costs of US$3,960 a tonne were expected, making Piedmont an expected low-cost producer on a 2023 cost curve.
Battery-grade lithium hydroxide monohydrate grading at least 56.5% was 100,000-110,000 yuan (US$14,826-16,308) a tonne in late December 2018.
Piedmont’s two-stage 22,700 tonnes a year lithium hydroxide operation was to have an initial 13-year mine life with first stage initial capex of US$109 million.
Stage two capex for the chemical plant was expected to be funded largely by internal cash flow.
After-tax free cash flow of about US$163 million was expected to be generated before completion of the plant.
An extra US$158 million of operating cash flow from concentrate and by-product sales before plant ramp-up.
Piedmont had $9.6 million cash on December 31, 2018 and expects about $4 million of cash outflows for March quarter 2019.
It has earmarked US$2.9 million for exploration and evaluation and hopes to later produce a feasibility study for the project.